CHALLENGER LIMITED — Capital/Financing Update 2005

MARKET RELEASE

5 July 2005

CHALLENGER TO SOUND OUT MARKET FOR POTENTIAL INFRASTRUCTURE INVESTMENT FUND

5 July 2005, Sydney - Challenger Financial Services Group Limited (CGF) today announced that it has commenced market soundings with retail brokerage firms and institutional investors to ascertain interest for a potential capital raising for a new ASX listed fund, to invest in global infrastructure assets.

At this point, no decision has been made to proceed with such an offering, and no Product Disclosure Statement has been authorised. Challenger has appointed JP Morgan and Citigroup to advise it in respect of any possible offering.

Challenger will inform the market further when details are available.

ENDS